Our business expert Jim Salmon, Vice President of Business Services, answers your questions on the EMV chip cards and the upcoming liability shift.
There’s a lot of talk about chip cards and the liability shift that’s coming our way. How necessary is it that my business accepts chip cards come October?
According to a recent Intuit survey, sixty-four percent of small businesses are aware of chip cards, but only 42 percent are committed to accepting chip card payments. Even more interesting is that just 19 percent know about the October liability shift. Starting in October 2015 year, businesses that don’t accept chip cards will be responsible for paying for fraud that occurs at the point of sale.
Updating your payments system is not a requirement, but doing so can be in your best interest depending on your business and your customer’s needs.
What Your Business Should Keep in Mind:
1. Take inventory of your current hardware and software
These next few months allow you the opportunity to reevaluate your current hardware and upgrade if necessary. Technology changes rapidly. You may want to invest in an integrated solution that accepts near field communication (NFC) payments like Apple Pay™ and Android Pay™, in addition to chip-card readers to keep pace and bring convenience to your customers. This may also be an appropriate time to enhance your revenue and accounting systems, if you have the funds.
2. Know your client base
If your customers typically pay with cash, there is no rush to become chip card compliant. On the other hand, if 50 percent or more are paying with chip cards, chances of fraud on one of those accounts is higher. It’s in your best interest to invest in a chip-enabled terminal.
3. Gauge your exposure to fraud
Has your business been exposed to fraud in the past? You should cover all bases and purchase a chip-card reader.
If your business doesn’t make a lot of transactions but accepts cards as a convenience, the cost of upgrading your terminal may outweigh the benefit for now. Examples of these types of businesses include contractors, lawyers, tutors and childcare providers.
EMV chip cards are already in the hands of millions of consumers. They are aware of the added security, but are not so educated on how to use the card at the point of sale. Take these next few months to educate yourself on the new system, so you can be a resource to your customers when you make the shift.
Apple Pay is a trademark of Apple, Inc. Android Pay is a trademark of Google, Inc.